Under the terms of the agreement, the developer consortium will supply WEC with electricity at SR 0.0534 ($0.014) a kilowatt hour (kWh) and water at SR 2.14 ($0.57) a cubic metre from the estimated $2,500 million co-generation plant, which will have capacity of 900 MW and 194 million gallons a day. WEC will then sell on the electricity and water to Saudi Electricity Company (SEC)
and Saline Water Conversion Corporation (SWCC) respectively.
‘This is a historic day for Saudi Arabia,’ said Water & Electricity Minister Abdullah al-Hussayen speaking at a press conference after the signing ceremony. ‘Energy demand today in the Shouaiba area is about 8,700 MW and is set to double every 11 years. We already have installed capacity of 9,100 MW, so this project will help us go some way to meeting future demand.’
Also concluded at the ceremony were the shareholders’, share sales and purchase, and land lease agreements for the 20-year build-own-operate (BOO) project. Formal contract signings on the project’s engineering, procurement and construction (EPC) element, to be carried out by Germany’s Siemens
and South Korea’s Doosan Heavy Industries & Construction
,are expected to take place by late December, with a view to issuing a notice to proceed on 1 January. Doosan will undertake the desalination portion, employing multi-stage flash (MSF) technology, while Siemens will be responsible for the construction of the power plant, which will burn crude oil sourced by WEC from SaudiAramco
, and supplied by WEC to the project company on an energy conversion basis. Both units are expected to be commissioned in the summer of 2009. Oman’s Sogex
will be the operation and maintenance contractor.
With a debt element of $1,875 million, Shouaiba is the world’s largest greenfield IWPP in terms of debt financing. It is also the first private power and water plant developed in the kingdom, providing potable water for the cities of Mecca, Jeddah, Taif and Al-Baha, and electricity for the western grid.
The Acwapower-led developer consortium was the sole bidder for the scheme when bids were submitted in March, and was selected as preferred bidder two months later. In August, the cabinet approved the formation of the Shouaiba Water & Electricity Company (SWEC)
, the project company, which the consortium will buy into once financial close is reached. SWEC’s final shareholding composition will see the developer group take a 60 per cent stake, with the remaining 40 per cent split between the Public Investment Fund (PIF) with 32 per cent, and SEC, with 8 per cent (MEED 11:3:05).
WEC’s advisers on its IWPP programme, which also includes the forthcoming Shuqaiq, Ras al-Zour and Jubail IWPPs, are HSBC
(financial), Germany’s Fichtner
(technical), and The Law Firm of Yousef & Mohammed al-Jadaan
and Clifford Chance
Technical adviser to the developer group is Germany’s ILF Consulting Engineers
, while Trowers & Hamlins
is the legal adviser.
For the scheme’s debt financing, Riyad Bank
is the co-ordinating bank and is joint financial adviser with Standard Chartered Bank
. The other underwriters are ABN Amro
, Arab Bank
and Saudi Hollandi Bank
on the conventional portion, and Al-Rajhi Banking & Investment Corporation
on the Islamic tranc